Snowy Hydro boss says 2028 deadline in doubt
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The news: Government-owned Snowy Hydro will likely miss a 2028 deadline for finishing its pumped hydro expansion project, Snowy 2.0, chief executive Dennis Barnes told a conference in Sydney.
The numbers: Snowy Hydro said last October it would exceed a $12 billion budget for the project, which itself had already been increased.
Reports from The Australian cite a cost blowout to $42 billion for the project, a figure Barnes has discredited for including transmission costs covering the whole electricity grid.
Instead, Barnes told the Australian Energy Council conference in Sydney, interest costs would be at most a couple of billion dollars and below an $8 billion figure some are citing.
Italian contractor Webuild is exposed to losses from significant cost hikes linked to the project, due to contract clauses. That’s despite a multi-billion contract negotiation, which locks Snowy into covering some of Webuild’s cost inflation.
Webuild made EUR4billion ($6.52 billion) in revenue from Australia last year, making it the second highest source of income for the contractor outside of Italy, The Australian reported.
The context: Snowy Hydro 2.0’s giant water battery will have a storage capacity of 350,000 megawatt hours, making it one of the world’s largest storage systems.
The battery system should be able to generate power for over a week at full capacity before needing refilling. Lithium-ion batteries have a maximum of eight hours of storage.
Energy storage capacity has become an increasingly pressing concern for governments around the world as the Iran war exposes companies and households to energy supply and price shocks.
The sources: The AFR, The Australian
